Yellow Medicine County sets preliminary levy of 3.42 percent

Two weeks ago it was reported that the Yellow Medicine County Board was looking at setting a zero percent preliminary levy based up on a state mandated cap. As it turns out, there was still more to meet the eye regarding the directive, and YMC property owners may see a little tax bump after all.

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By Scott TedrickNews Editor

Granite Falls Advocate Tribune

By Scott TedrickNews Editor

Posted Sep. 12, 2013 at 10:52 AM

By Scott TedrickNews Editor
Posted Sep. 12, 2013 at 10:52 AM

Two weeks ago it was reported that the Yellow Medicine County Board was looking at setting a zero percent preliminary levy based up on a state mandated cap. As it turns out, there was still more to meet the eye regarding the directive, and YMC property owners may see a little tax bump after all.

This past Tuesday YMC commissioners approved a preliminary 2014 budget of $16.8 million and a tax levy increase 3.42 percent, upon hearing an update on the county’s budget situation from Finance Director Michelle May.

May’s budget proposal was presented to the board with $130,000 in projected revenue losses, nearly $300,000 in expense increases and roughly $32,000 in additional fund requests that together comprise the majority of the potential budgetary shortfall that the county must rectify during the budget process. The loss in revenues was largely related to a decline in interest income on investments ($45,000) as well as program funding ($70,000), while the expenses were mainly that of increased health insurance rates ($160,000) and salaries ($120,000).

The county’s options for balancing the budget involve raising revenue, cutting expenses (services), deficit spending and/or increasing the tax levy. Initially May told commissioners that legislative action would limit the county’s ability to address any budget shortfall by establishing a zero percent levy cap for this county (meaning there could be no levy increase at all), but later discovered this wasn’t the case.

“Upon gaining further clarification from the Department of Revenue it was made apparent that the county bond levy and tax abatements could be added to the levy cap,” she said.

According to May, these two items total $297,737, or a potentially 3.42 percent increase to the county’s property levy––each percentage increase generating $86,732 in revenue. For perspective, the aforementioned group of major expense increases listed above total $450,000 alone.

Given the size of the budgetary hole facing the county, commissioners would vote to set the maximum preliminary levy––knowing that they have the opportunity to reduce (increases are prohibited) the levy at the time its sets the county’s final budget and levy in December.

With the inclusion of a 3.42 percent levy increase, the preliminary budget approved by commissioners for 2014 includes revenues of $16.294 million and expenses of $16.8 million, which is actually a reduction in both 2013 revenues of 16.72 million and expenses of $17 million. According to May, the $566,000 remaining deficit would be addressed by drawing down county reserves.

At present, May said the county has a healthy reserve of roughly 12 million dollars that would cover county operations for 8.5 months. It is the recommendation by the state auditor that counties maintain reserves in the range of 6-9 months.

According to May, commissioners intend to perform an extensive review of the county budget before the final version is adopted later this year. “We have the opportunity over the next few months to perform a thorough review of our operations to ensure we are providing services to the taxpayers in the most efficient way,” May said. “In addition, we will be performing multi-year budgeting and strategically planning for 2014, 2015, and beyond.”

Page 2 of 2 - In other news, commissioners approved the hire of Deputy Sheriff. Michael Jenson at $18.35 per hour.